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Warren Buffett just made a quick $12 billion on a clever Bank of America investment

Because of an astute investment made in Bank of America six years ago while the bank was struggling, Warren Buffett is about to make a quick $12 billion and become the financial institution's largest shareholder.

Buffett's Berkshire Hathaway said Friday it will exercise warrants in Bank of America that will allow it to acquire 700 million common shares in the bank at an exercise price of just $7.14 each, or about $5 billion.

Bank of America shares closed Thursday at $24.32 a share, making that stake actually worth more than $17 billion. So it's a quick $12 billion paper profit for the Oracle of Omaha.

After passing the second of two annual stress tests by the Federal Reserve, Bank of America said Wednesday it would hike its annual dividend to 48 cents a share, or 12 cents a quarter, a 60 percent increase.

That was enough for Berkshire...


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